84 IPRIS Viewpoints JANUARY 2012 Portugal’s economic diplomacy: A new paradigm or old rhetoric? PAULO GORJÃO Portuguese Institute of International Relations and Security (IPRIS) After ousting Socialist Prime Minister José Sócrates on performance seems to dictate the level of international the 5 June 2011 parliamentary elections, Conservative influence. Still, Paulo Portas believes that nowadays Prime Minister Pedro Passos Coelho’s PSD formed a sovereignty is strongly dependent from “the assessment coalition government with the rightist CDS-PP. Sworn of a country’s ability to pay its debt”.4 in on 21 June 2011, the new coalition government The priority given to economic diplomacy is also perceived presented its program to the Parliament on 29 June as “a counter-cyclical policy, which gives resistance to the 2011. Regarding foreign policy, the program was quite Portuguese economy”.5 The top four exporting markets clear: Portugal must “adopt a new national strategic of the last ten years – Spain, Germany, France, and the priority: a very strong economic diplomacy”.1 Since then, United Kingdom – are the destination for more than 50% Paulo Portas, the leader of the CDS-PP (Democratic of Portuguese exports. Overall, the European Union (EU) and Social Centre-People’s Party) and the new Minister accounts for 70% to 75% of Portugal’s exports. for Foreign Affairs, on several occasions made it clear The fact that “the euro area economy is (…) expected to go that the “economic diplomacy is the first institutional into a mild recession in 2012”, while for 2013, GDP growth priority of the Ministry of Foreign Affairs”.2 It is a strong is estimated to be 0.8%, reinforces the perception that “political priority”.3 market diversification is required and urgent.6 Indeed, Paulo Portas believes that unlike in the past, economic the European recession and political uncertainty mean issues now heavily influence the balance of international that Portugal strongly needs to diversify the markets for power. Indeed, as a consequence of the geopolitical its exports as well as the sources of inward investment. power shift away from the Euro-Atlantic region towards In order to match words with deeds, in the past few months the Asia-Pacific, European countries face a serious Paulo Portas has carried out what he calls a “quiet revolu- threat of decline in strategic importance. Thus, economic tion”. He believes that the Portuguese diplomatic network 1 Programa do XIX Governo Constitucional (Presidência do Conselho de Ministros, 4 “Paulo Portas sublinha importância do acesso das empresas ao poder 2011), p. 100. político” (Lusa, 12 January 2012). 2 Francisco Teixeira, “Diplomacia económica é a primeira prioridade do MNE” 5 Pedro Sousa Pereira, “MNE assina acordos bilaterais e encontra-se com (Diário Económico, 16 November 2011). empresários em Doha” (Lusa, 11 December 2011). 3 Nuno Ribeiro, “Portas defende urgência da diplomacia económica” (Público, 4 6 “Global Recovery Stalls, Downside Risks Intensify” (World Economic Outlook: January 2012). Update, 24 January 2012). IPRIS Viewpoints PortugAl’s economic diPlomAcy: A new parAdigm or old rhetoric? | 2 must track the movements of the economy. Therefore, he Paulo Portas never said that everything in foreign policy explained: “Portugal has to be where the Portuguese are, is about trade. It is true that the decision to close some where are the interests of Portugal and where are the busi- of the Portuguese embassies in the EU – Estonia, Latvia, ness opportunities”.7 Portas conveyed this message in Qa- Lithuania, and Malta, in particular – was not the only tar, where Portugal opened its latest embassy, in Decem- option on the table. Instead of being represented with ber 2011. Earlier, in November 2011, he announced that an ambassador, an alternative solution could have been the embassies in Andorra, Bosnia-Herzegovina, Estonia, to maintain the embassies with only a chargé d’affaires Kenya, Latvia, Lithuania, and Malta would be shut down.8 in each one of them. Still, other observers also shared Moreover, in October 2011, the Portuguese government the view that Portugal should “balance the excess of decided to have joint overseas promotion of trade, foreign diplomatic representation in the EU” with new embassies investment and tourism. One month later, after a lengthy elsewhere.14 In any case, the facts do not seem to support internal reorganization, AICEP – the government business the concerns voiced by Paulo Rangel. entity responsible for the promotion of Portugal abroad – On the other hand, Basílio Horta, the former president of fell under the formal guardianship of Paulo Portas. Last but AICEP and nowadays a parliamentarian elected in June not the least, on 3 January 2012, the Minister for Foreign Af- 2011 in the lists of the Socialist Party, has emphasized fairs announced a “diplomatic spring” involving the biggest the continuity between the current and previous diplomatic reshuffle of the last ten years.9 Portas explained governments.15 Between 1998 and 2008, the weight of the choices saying that he was allocating the best diplomats non-EU markets regarding Portuguese exports rose to the most demanding posts. from 16% to 26%, a trend consolidated in particular The task ahead is Herculean. Paulo Portas will have to do since 2005, under the previous Socialist government.16 more with less in 2012, bearing in mind that in 2012 the Rhetoric aside, in his view, the current priority given Ministry of Foreign Affairs’ (MFA) budget is €40 million to economic diplomacy is old wine in new bottles. The (10.6%) less than in 2011.10 With a smaller budget, more “quiet revolution” of Paulo Portas probably is less or less the same number of diplomats, and without any ‘revolutionary’ than he would like to admit. specific training programmes for diplomats in commercial A more relevant criticism focuses upon how the strategy diplomacy and economics, it will be a miracle if the MFA of the economic diplomacy is being implemented. Like is able to present immediate and significant results. others, Paulo Portas wishes to build stronger bilateral Budgetary constraints also mean that Portas cannot open relationships with the emerging economies in Africa, new embassies as soon as he would like. Thus, the best he Asia, Latin America, or in the Persian Gulf. It is clear from could do was to announce that new embassies would be previous statements that the Minister for Foreign Affairs open in Asia and Latin America until 2015.11 perceives economic diplomacy mainly as a state-to-state The priority given to economic diplomacy has been warmly matter. There is no strategy for multilateral economic welcomed by many Portuguese elites. However, a few diplomacy. For example, Paulo Portas did not once critical remarks have been made. Paulo Rangel, a former mention the proper place reserved for the EU within his candidate to the leadership of PSD (Social Democratic Party) strategy. Yet, the EU is a relevant instrument to secure in 2010, and currently member of the European Parliament, trade and market access in the emerging economies, as well as vice-chair of the Group of the European People’s and Portugal should actively support negotiations on Party, said that it was a “mistake” to “limit the horizon of EU free trade agreements, since they would certainly foreign policy to the economic front”.12 Portas rejected provide more opportunities in order to promote exports this criticism, emphasizing that “institutional and political as well as to attract inward investment. Colombia and diplomacies did not disappear but they are accompanied by Peru demonstrate how important free trade agreements economic diplomacy”.13 could be in order to boost economic bilateral relations.17 The EU is currently negotiating free trade agreements with Canada, India, Malaysia, Singapore, Ukraine, as well 7 Pedro Sousa Pereira, “MNE assina acordos bilaterais e encontra-se com as with the ASEAN and the Gulf Co-operation Council empresários em Doha” (Lusa, 11 December 2011). (GCC).18 The Portuguese economic diplomacy would 8 Eva Gaspar, “Portas fecha sete embaixadas portuguesas” (Jornal de Negócios, certainly benefit from a growing list. 16 November 2011). 9 Nuno Sá Lourenço, “Governo nomeia uma nova geração de embaixadores” (Público, 4 January 2012). 14 See Paulo Gorjão, “The reform of the Portuguese diplomatic network” (IPRIS 10 Orçamento do Estado para 2012: Relatório (Ministério das Finanças, October Viewpoints, No. 30, December 2010), p. 1. 2011), p. 160. 15 Basílio Horta, “Diplomacia económica” (Diário Económico, 16 January 2012). 11 Eva Gaspar, “Portas fecha sete embaixadas portuguesas” (Jornal de Negócios, 16 Orçamento do Estado para 2011: Relatório (Ministério das Finanças e da 16 November 2011). Administração Pública, October 2010), p. 32. 12 Paulo Rangel, “Uma moda e uma ilusão: a chamada “diplomacia económica”” 17 See Pedro Seabra, “Peru and the search for gateways into the EU” (IPRIS (Público, 29 November 2011). Viewpoints, No. 83, January 2012). 13 “Diplomacia económica: Seminário diplomático apresenta novo modelo com 18 See “International Affairs: Free Trade Agreements” (European Commission, economia mundial em tempos de incerteza” (Lusa, 3 January 2012). Enterprise and Industry, July 2011). IPRIS Viewpoints PortugAl’s economic diPlomAcy: A new parAdigm or old rhetoric? | 3 Last but not the least, on different occasions Paulo Portas said that ambassadors will be scrutinized, measured and will have to produce results. It is unclear exactly when and how diplomatic accountability will be enhanced. In order to minimize subjective scrutiny, the Minister for Foreign Affairs should devise a clear evaluation grid, which must have into account the specificities of each diplomatic post. For decades, we believed that in the 1970s when it was asked to Zhou Enlai his view of the significance of the French Revolution of 1789, he answered that it was “too early to say”. We now know that Enlai was speaking about the 1968 students’ riots in Paris.